Blade Watch

Finextra

The UK government was forced to rule out letting failed bank Northern Rock wind down because poor IT systems would have left depositors waiting for their money, risking another major run.

The revelation comes in a report by the National Audit Office (NAO) on the government’s handling of the failed bank, which was nationalised in February 2008.

The report says that in September 2007 the Treasury considered stopping Northern Rock from taking deposits and writing new mortgages and beginning a process of winding down the company.

However “inadequate IT systems at Northern Rock meant that depositors would have had to wait for their money”.

The firm operated a manual account closure process and estimated that it would have taken up to 10 to 12 weeks to repay depositors, with a likely error rate of 25%.

It’s interesting to see how the IT was a component part in risk, in corporate exposure or failure. Let’s not forget that as you integrate your business with your IT, that your IT is supportable, available and scalable becomes an ever more important aspect of your business.  That your Compaq Proliant 1850 meets current ‘normal’ demands is fine, but what in extra-ordinary events? What’s your organizational ability to cope in these difficult times, how do the systems and the applications scale up or down and what technologies can you leverage to achieve this?

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